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Distinguish Between 

Direct Cost and Indirect Cost 
 

Direct Cost	Indirect Cost
Expenses incurred directly in course of production is called direct cost.	Expenses incurred indirectly in the operation of the unit is called indirect cost.
Material, labour and other expenses which are directly related to production is considered as direct cost.	Office, management and administration expenses which are indirectly related to production is considered as indirect cost.

Direct Labour Cost and Indirect Labour Cost
 

Direct Labour Cost	Indirect Labour Cost
Labour which is directly consumed in the process of production. It is also know as productive or operating labour.	Labour which indirectly helps in the production process, which cannot be easily traced .
Eg- Wages	Eg - Salesman's Salary

Q 1. What are the elements of cost ?
Ans :- There are four broad elements of cost.
1. Materials :- The Substance from which a product is made is know as material. It may be in a raw or a manufactured state. Cotton used in manufacturing cloth, sugarcane used in producing sugar, rubber and leather used for producig shoes are examples of materials. Material can be direct as well as indirect.
2. Labour : Labour means the human effort required for converting materials into finished goods. It can be direct as well as indirect.
3. Expenses : Expenses may be direct or indirect.
4. Overheads : The term 'overhead' includes indirect material, indirect labour and indirect expenses.